Tuesday, September 7, 2010

Producing vs Consuming

“Earn a dollar, spend 80cents... happiness!
Earn a dollar, spend $1.20... misery!!!

In this weeks post, we continue exploring ideas and distinctions on ‘wealthing your life’ - how to create true wealth, joy and life enhancing happiness. Remember, the key with wealthing your life is to bypass the greed for mere money and instead build skills and strategies into your life for creating life enhancing wealth.

Let me share another story from my life...

Many years ago I worked with a fellow consultant who was constantly broke. Though he earned hundreds of dollars an hour, he had no money in the bank and no investments or assets to his name. His problem was he consumed more than he produced! He would waste his money on expensive meals, pointless and costly toys and high priced rental accommodation. Everything was hired, leased or rented. We called him ‘gadget boy’ because he always had to have the latest gadget or technology on the market and as soon as it was a few months old he would give it away to someone else.

He owned no real wealth of any sort and his outgoings were equal to or larger than his income. He often lived on a buffer of credit card debt while he waited for his next payment to arrive. I would occasionally have to loan him money just so he could eat a meal with me or fill his car with fuel. What a crazy life!

While he literally had a 6 figure income every year, he was one of the poorest people I know.

Thankfully, my father taught me from an early age the vital importance of producing more than I consume. He gave me the powerful thinking tool of the insight that ‘It’s not your incomings – it’s your outgoings’ that are crucial for generating wealth and living a great life. You see, you can earn a relatively modest income and be wealthier than my friend described above.

All you have to do is ensure that your expenses are much less than your income, and save the wealth that you thereby generate. Use that wealth to create investments and assets that in turn generate more income. Make your wealth work for you. Before long you’ll find you are rich in freedom and choice with a healthy buffer of wealth to support you no matter what happens in life – you’ll be financially free. It’s quite simple, maximise your incomings, minimise your outgoings and save the difference. Invest wisely and your wealth will steadily grow.

Thinking Tool – Produce more than you Consume

It’s not your incomings – it’s your outgoings!



to your life enhancing success,
smiles,
Grant

5 comments:

  1. Grant, it sounds so simple. Yet soooo many people do not get it. I'm sure some who read this important post will be inspired by it. If your words get just one person off the treadmill of "earning $1.00 and spending $1.20," your efforts will be well worth it.

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  2. How True.My Dad taught me the same lesson.Confucios say Man who earns $1 and Spends $1-01 go broke

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  3. Thanks Jean and Anon, for your comments. I always really appreciate people making the effort to share their thoughts and feedback!

    smiles, Grant

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  4. Hey Grant, I know your Father well and he fortunately taught me the same way of thinking about producing and consuming. This is a great and valuable lesson. Thanks for highlighting this!

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  5. Thanks Anonymous, I'm glad my father's insights have echoed through your and my lives. Thank you so much for commenting and sharing.

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